As one of the world’s most renowned investors, Warren Buffett is known for his unshakable belief in the strength of the American economy. His famous mantra, “Never bet against America,” has resonated with investors for decades. In fact, Buffett’s investment strategy has always centered around one key theme—investing in companies deeply embedded in the U.S. economy with long-term growth potential. Recent data reveals that two American stocks, American Express and Bank of America, make up a combined 27.3% of Buffett’s Berkshire Hathaway portfolio.
American Express holds a prominent place in Warren Buffett's portfolio, accounting for nearly 17%. The credit card giant has been a mainstay for Berkshire Hathaway since 1991. Today, American Express boasts 147.5 million cards in circulation, with millions of new cards added to the network each year. In recent years, the company has made significant strides in attracting younger consumers by offering perks such as annual Uber ride credits, effectively tapping into this lucrative market. Last year, spending by younger customers grew 14%, double the overall business growth rate. This shift has led to a significant revenue boost for the company.
For Buffett, the appeal of American Express goes beyond its brand and market share. The company benefits from a highly loyal customer base, where consumers tend to hold onto their cards for decades, creating a steady stream of revenue. Over the last decade, American Express’s earnings per share (EPS) have grown by 159%, and with the pandemic behind us, its growth has accelerated. Furthermore, the company’s stock buyback program has reduced its outstanding shares by 30%, a move that has greatly benefited shareholders.
Bank of America, another key stock in Buffett's portfolio, has been a significant player in the U.S. banking system for over a century. With assets totaling nearly $3.4 trillion, the bank’s operations span across consumer banking, wealth management, and global investment banking. Buffett made his move in 2011, purchasing shares during the aftermath of the Great Recession when the stock price was low. The bank’s diverse business model and stable customer base made it an attractive investment for Buffett.
While traditional banks like Bank of America face challenges in today’s rapidly evolving financial landscape, the company has managed to maintain a strong position by leveraging its extensive history and trusted brand. Today, the bank serves over 40 million mobile banking users, providing a steady stream of income from these long-term customers. Since Buffett’s initial investment, Bank of America’s net income has grown by nearly 2,000%. Like American Express, the bank has also reduced its outstanding shares by 30% in the past decade, driving up shareholder returns.
Buffett’s preference for these two stocks is no coincidence. Both companies share key characteristics—strong brands, loyal customer bases, and the ability to remain dominant in their respective markets for years to come. These qualities align with Buffett's investment philosophy: invest in businesses with sustainable competitive advantages that can continue to create value for shareholders in the long term.
For Buffett, investing isn’t about chasing short-term stock fluctuations; it’s about identifying companies that possess the core strengths to thrive over decades. American Express and Bank of America serve as perfect examples of this strategy in action. Their strong competitive positions, robust customer loyalty, and long-term growth potential make them valuable assets in Buffett's portfolio—and for any investor looking to emulate his success.
In both the premium credit card market and the U.S. banking system, American Express and Bank of America have proven themselves to be resilient giants. Their brand recognition, coupled with a stable and growing customer base, positions them to weather economic cycles and continue to grow for years to come. For investors looking to follow in Buffett’s footsteps, choosing companies with lasting competitive edges and long-term growth potential is key to achieving similar success in the market.